Sunday 4 October 2020

Serco and Catch 22


Serco provides services in defence, justice and immigration, transport, prisons and catering. In 2006 they started moving into the NHS ‘market’, including clinical services, hospital management and catering.

When I say ‘provides services’ that is not strictly correct. Serco provides nothing. At least nothing tangible. It does provide profits to the company and its shareholders. The actual ‘providing’, of getting a specific job carried out, is done by others. If they have expertise in anything, it is as financial managers and middlemen. Serco sub-contract the real work to others.

In 2014, Serco withdrew from the NHS clinical services market after eight years. This followed a series of loss-making contracts and fines totalling £100 million. They admitted giving false data to the NHS when running GP services. It was reassuring when the company announced there had been “a complete change of management and significant reform of all governance and procedures” It was short-lived.

In 2019, Serco was fined £3 million by the Home Office for contract failures relating to its provision of housing for asylum seekers. In the same year, the firm signed an agreement to escape prosecution by the Serious Fraud Office over a notorious prisoner electronic-tagging scheme run by its subsidiary, Geografix. An investigation found that Geografix had engaged in fraud and false accounting, inventing half a million pounds worth of costs which were ‘complete fabrications’. Serco had to pay the government almost £100 million compensation and legal costs as a result of its subsidiary’s behaviour.

None of this matters because Serco are back, thanks to the government awarding massive NHS contracts without the checks and balances normally applied to contract tenders.

Today they operate 30% of Covid test sites, with the rest run by Sodexo and G4S, Mitie, Boots and the army. Financial ‘oversight’, courtesy of Deloitte. To date, these contracts total £500 million.

These deals have have been kept secret and are not advertised or open to public competition. Furthermore, Serco is allowed to “refine” its own service level agreements, oversee its own monitoring, and are not subject to penalties for underperformance.

David Davis MP, the former Brexit Secretary, has said, Whilst it’s entirely understandable that the Department of Health have accelerated or maybe even short circuited some of the procurement processes in the circumstances, there is no excuse for secrecy either over the number and size of the contracts and most particularly over the level of service the contracts deliver.”

Professor Allyson Pollock, member of Independent SAGE, said it was “beyond belief” and “extraordinary” that despite clear evidence of the extraordinary failures of the privatised test and trace system”, the government wasn’t “terminating these contracts and reinvesting it into public health services and labs which have been shown to be highly effective.”

You may have watched Panorama when a NHS health worker reported sitting at home, week after week, waiting to be alloted Covid clients. The phone never rang. The track-and-trace programme itself could not be tracked or traced.

If you check the internet, you can find that everyone from travel agents to rodent infestation companies are grabbing track-and-trace contracts.

Health minister, Edward Argar, was formerly head of public affairs at Serco, while the company’s chief executive, Rupert Soames, is the brother of former Tory MP and party grandee Nicholas Soames.

The fiasco is a result not just of corruption, but of Tory cuts to public health and their dogmatic obsession with outsourcing. Instead of throwing money at these private firms, they should have invested in the NHS and their labs to build an effective track-and-tracing service.

When I research the background to the coronavirus ‘business’, I am reminded of Joseph Heller’s Catch 22, but without the humour. “They buy my tomatoes at four cents apiece and sell them back to me the next day for five cents apiece. They make a profit of one cent apiece. I make a profit of three and a half cents apiece.”

Time to sit down and read Heller’s book again.